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Yahoo
3 hours ago
- Business
- Yahoo
Trump's mass firings to remain on hold, appeals court rules
Mass firings of federal employees which were ordered by US President Donald Trump will remain paused, an appeals court has ruled. President Trump had signed an executive order in February directing agency heads to begin "large-scale reductions" in staffing. Those efforts to slash the federal workforce were halted by a California judge earlier this month. On Friday in a 2-1 ruling, a San Francisco-based appeals court denied the Trump administration's request to unfreeze that injunction. It is likely the administration will now ask the US Supreme Court to weigh in. "The Executive Order at issue here far exceeds the President's supervisory powers under the Constitution," the Ninth Circuit Court of Appeals wrote. "The President enjoys significant removal power with respect to the appointed officers of federal agencies." The Trump administration had sought an emergency stay of an injunction which had been given by Judge Susan Illston of San Francisco. The judge questioned how an overhaul of federal agencies could be actioned without congressional authorisation. The case was brought by federal employees unions, local governments and non-profits who argued against Trump's executive order, as well as directives which were issued by the Office of Personnel Management and Office of Management and Budget to implement Trump's policy. The cuts are part of the Trump administrations efforts to curtail government spending through funding freezes and firings - led by the Department of Government Efficiency (Doge). Trump has repeatedly promised to slash government spending and reduce the federal workforce. He tasked billionaire Elon Musk and Doge with leading that charge. Tens of thousands of federal workers have reportedly been fired, taken buyouts or been placed on leave since Trump took office. The Trump administration said they plan to fight back against the latest court ruling. "A single judge is attempting to unconstitutionally seize the power of hiring and firing from the Executive Branch," the White House said in a statement to US media. In Oval Office farewell, Trump says Elon Musk is 'not really leaving' What is Doge and why has Musk left? US judge says mass firings of some federal workers likely illegal
New York Post
4 hours ago
- Politics
- New York Post
Federal appeals court upholds pause on Trump Administration's mass firings
WASHINGTON — A federal appeals court upheld a legal pause on President Trump's mass firings from various agencies, delivering the Republican administration another legal setback in reshaping the executive branch. The San Francisco-based US Ninth Circuit Court of Appeals in a 2-1 opinion Friday declined to let the Trump administration proceed with its staffing cuts, following a pause by a federal judge earlier this month to its reductions in force (RIFs) efforts overseen by Elon Musk's Department of Government Efficiency (DOGE). At issue was Trump's Feb. 13 executive order demanding the 'large-scale reductions in force' to federal agencies, which prompted a coalition of unions, non-profits and local governments to sue. 4 The San Francisco-based US Ninth Circuit Court of Appeals in a 2-1 opinion declined to let the Trump administration proceed with its reductions in force (RIFs) plan. Getty Images 'The Executive Order at issue here far exceeds the President's supervisory powers under the Constitution,' wrote Circuit Judge William Fletcher, an appointee of former President Bill Clinton. 'The President enjoys significant removal power with respect to the appointed officers of federal agencies,' he added. 'But even that power is not unlimited.' The majority opinion, joined by Biden-appointed Circuit Judge Lucy Koh, also noted 'cuts of up to 50%' of Department of Energy staff, the elimination of AmeriCorps volunteer youth programs and the layoffs of thousands of other probationary employees in the government. 4 Fired federal employees gather in the atrium of the Hart Office Senate Building on April 29, 2025 in Washington, DC. Getty Images Circuit Judge Consuelo Maria Callahan in a dissenting opinion charged that the plaintiffs were 'bypassing the comprehensive administrative scheme that Congress has enacted to handle federal sector labor and employment disputes.' 'The district court nevertheless entertained Plaintiffs' claims and concluded that the Executive's actions likely violate separation of powers — without making any finding that any agency's RIF is likely to violate any statute,' wrote Callahan, an appointee of former President George W. Bush. 'The court then entered a sweeping preliminary injunction that strips the Executive of control over its own personnel,' she disputed the lower court ruling, noting the Trump administration was likely to succeed in the case. 4 The Trump administration had previously asked the US Supreme Court to intervene and allow the federal workforce restructuring. Getty Images The Trump administration had previously asked the US Supreme Court to intervene and allow the federal workforce restructuring initiated by the Office of Personnel Management and the Office of Management and Budget — but the high court has yet to take up the case. US District Judge Susan Illston in San Francisco granted a temporary restraining order on the restructuring for 14 days, ruling May 9 that Trump officials had made the move without congressional authorization. 'The Court here is not considering the potential loss of income of one individual employee, but the widespread termination of salaries and benefits for individuals, families, and communities,' Illston wrote. 4 Staffers at USAID were forced out due to other consolidations in the executive branch begun under Trump. AFP via Getty Images On May 22, the California judge extended that to a preliminary injunction, initiating the appeal to the federal circuit court. 'A single judge is attempting to unconstitutionally seize the power of hiring and firing from the Executive Branch,' White House spokesman Harrison Fields fired back in a statement. 'The President has the authority to exercise the power of the entire executive branch — singular district court judges cannot abuse the power of the entire judiciary to thwart the President's agenda.' A second appeal to the Supreme Court has yet to be filed.
CNBC
7 hours ago
- Business
- CNBC
DoorDash CEO Tony Xu is taking on the role of industry consolidator in food delivery
During the depths of the Covid pandemic, with restaurants around the country facing an existential crisis, DoorDash CEO Tony Xu had an unconventional proposal. He wanted to cut commissions. Chief Business Officer Keith Yandell worried that such a move would result in a massive hit to profits ahead of the company's planned IPO. But Xu made a persuasive case. "If restaurants don't thrive, we cannot," Yandell told CNBC in a recent interview, recalling Xu's perspective at the time. "We need to take a leadership position." The company ended up sacrificing over $100 million in fees, Xu later said. Since starting DoorDash on the campus of Stanford University in 2013, the now 40-year-old CEO has navigated the notoriously cutthroat and low-margin business of food delivery, building a company that Wall Street today values at close to $90 billion. The stock has emerged as a tech darling this year, jumping 23%, while the Nasdaq is still down for the year largely on tariff concerns. More than four years after its IPO, net profits remain slim. But that's not getting in the way of Xu's mission to become an industry consolidator, using a combination of cash and new debt to fuel an acquisition spree at a time when big tech deals remain scarce. Earlier this month, DoorDash scooped up British food delivery startup Deliveroo for about $3.9 billion and restaurant technology company SevenRooms for $1.2 billion. "What we've delivered for a customer yesterday probably isn't good enough for what we will deliver for them today," Xu told CNBC's "Squawk Box" after the deals were announced. This week DoorDash announced the pricing of $2.5 billion in convertible debt, and said the proceeds could be used in part for acquisitions. The San Francisco-based company has a history with scooping up competitors to grow market share. In 2019, it bought food delivery competitor Caviar for $410 million from Square, now known as Block. About two years later, DoorDash said it was paying $8.1 billion for international delivery platform Wolt. The deal was its last big transaction until this month. When DoorDash entered the food delivery market, it had to face off against the likes of GrubHub and Seamless, which later joined forces. That combined entity was bought late last year by restaurant owner Wonder Group. In 2014, Uber launched Uber Eats, which is now DoorDash's biggest competitor in the U.S. "It's a very competitive market, and I think merchants do have choice," Xu said in the CNBC interview. "What we're focused on is always trying to innovate and bring new products to match increasing standards and expectations from customers." DoorDash didn't make Xu available for an interview for this story, but provided a statement about the company's acquisition strategy. "We're very picky, very patient, and conscious that, for most companies, deals don't work out in hindsight," the company said. "When we see an opportunity that brings value to customers, expands our potential to empower local economies around the world, and has a path to strong long-term returns on capital, we tend to push our chips in." DoorDash differentiated itself early on by cornering suburban markets that had fewer delivery options, while other players attacked city centers. When Covid shut down restaurant dining in early 2020, DoorDash capitalized on the booming demand for deliveries. Revenue more than tripled that year, and grew 69% in 2021. Colleagues and early investors credit a customer-first focus for much of Xu's success. Gokul Rajaram, who joined DoorDash through its Caviar acquisition, described Xu as "the best operational leader in the U.S." after Amazon founder Jeff Bezos. Restaurants haven't universally viewed DoorDash as an ally. Commissions can reach as high as 30%, which is a hefty cut to fork over. Many restaurants have reluctantly paid the high fees because of DoorDash's dominant market share, which reached an estimated 67%. In 2021, the company introduced three tiers of pricing, with a basic option at 15% for more price-sensitive businesses. DoorDash needs the high fees in order to stay in the black. The company's contribution profit as a percentage of total marketplace volume hovers below 5%. Colleagues who have known Xu for decades say the food delivery entrepreneur hasn't changed much since the early days of the company. Yandell said Xu once took advice from his young daughter, who complained about a routing issue while accompanying him on food delivery orders. All employees, including Xu, are required to complete orders and handle support calls every year as part of the company's WeDash program. In a part of the country known for the pomp of its wealthy founders, Xu has a very different reputation. Early workers recall memories of Xu pulling up in a dilapidated green 2001 Honda Accord to team events, or participating in company knockout basketball games referred to as "knockys," next to the animal hospital in Palo Alto, which DoorDash briefly called its headquarters. Xu also personally approved every offer for the company's first 4,000 employees. Xu spends many mornings answering customer service complaints. He often drops his kids off at school and, after tucking them in at night, hops on calls with international regions, colleagues say. Xu is an avid Gold State Warriors basketball fan but has a soft spot for the Chicago Bulls, having spent many years in Illinois. Once or twice a week, Xu squeezes in a morning run, and will often do so while traveling to explore different neighborhoods and stores. Xu was born in China and moved with his family to Champaign, Illinois, in 1989. Growing up, he played basketball and mowed lawns to save up for a Nintendo. He told Stanford's View From the Top podcast in 2021 that the experience, and watching his parents hustle, taught him how to "earn your way into better things." His "characteristics became the company's values," said Alfred Lin, an early DoorDash investor and partner at venture firm Sequoia. Xu often attributes his entrepreneurial spirit to his parents. His mother worked as a doctor in China, and juggled three jobs in the U.S. for over a decade, saving up enough to eventually open a medical clinic. His father worked as a waiter while pursuing a Ph.D. Xu said on the podcast that watching his mom gave him a deep understanding of what it takes to run a small business, which came in handy in DoorDash's early years as he was trying to convert restaurants into customers. Employees say Xu has a reputation for detecting hidden talents among his colleagues. Jessica Lachs, the company's chief analytics officer, was working as a general manager assisting with DoorDash's Los Angeles launch when Xu guided her toward her passion for data. "He believes in leaning into the things you're really good at, rather than trying to be mediocre at a lot of things," she said. After Toby Espinosa, DoorDash's ads vice president, lost a deal with a major fast food company during his early years at the startup, Xu told him to work "10 times harder" and become an expert in his field. A few years later, the company secured the partnership, Espinosa said. Grit and struggle defined the early years of DoorDash. The founding team of four managed deliveries around Stanford and Palo Alto though a Google Voice number directed to their cellphones. DoorDash emerged out of a Stanford business school course known as Startup Garage, taught by Professor Stefanos Zenios. The class requires students to present a business idea, test it, and then pitch it to investors. Zenios said Xu stood out with his data-driven approach and natural leadership qualities. The team tested two different ideas, including a platform that helped small businesses better track the effectiveness of their marketing, he recalls. Zenios called the idea to target suburban areas a "brilliant insight." Xu and his team entered Y Combinator in the summer of 2013. The three-month startup accelerator program is known for spawning companies like Airbnb, Stripe and Reddit. Every session culminates with a demo day in front of some of Silicon Valley's biggest investors. The DoorDash idea excited Paul Buchheit, creator of Gmail and a partner at Y Combinator. But like many other potential investors, Buchheit was skeptical about the economic model. "You had a talented team of founders working on what I thought was an idea that had potential," he said. "That's basically the formula for a good startup." On pitch day, the company failed to lure any venture firms, but Buchheit later participated as a seed investor. Shortly after demo day, DoorDash encountered Saar Gur of Charles River Ventures. Gur had been looking for a food delivery platform to back and was conducting due diligence on another company when a friend led him to DoorDash. By the end of their first meeting, they were "finishing each other's sentences," Gur said. Sequoia's Lin initially passed on DoorDash after the Y Combinator pitch, but kept in touch with the team. Lin said he wanted to see data that showed the platform could penetrate beyond Stanford and Palo Alto, and retain customers. He ended up leading two institutional rounds, attaining a 20% stake for Sequoia at the time of the IPO. "Tony always believed that his company would succeed, or they'll find a way to succeed," Lin said. Shortly after its Y Combinator stint, DoorDash hit an early roadblock. Following a Stanford football game, a rush of orders bombarded its delivery system causing massive delays, Xu told Y Combinator's CEO Garry Tan in an interview this year. The founders refunded the orders and spent the night baking cookies, then driving them to customers early the next morning. Oren's Hummus co-owner Mistie Boulton said DoorDash still takes that approach. The team comes to meet with her every quarter and she serves as a beta tester for new products. The restaurant, which started in Palo Alto and has since expanded to a half-dozen locations across the Bay Area, was one of DoorDash's first clients, latching onto the opportunity to reach more customers beyond its small establishment that frequently had lines snaking out the door. "We just fell in love with the idea," Boulton said. "The number one thing that encouraged and enticed me to want to work with them was Xu's passion. He really is one of those people that you can count on." Wall Street is now counting on Xu's ability to execute big deals, even with the company having this month surpassed $10 billion in delivery orders worldwide. The acquisition of Deliveroo, based in London, marks a renewed effort by DoorDash to expand its presence overseas, following the purchase of Finland's Wolt three years ago. The cash deal for SevenRooms, a New York City-based data platform for restaurants and hotels to manage booking information, takes DoorDash into an entirely new category. Xu told CNBC that DoorDash is a "multi-product company now that's operating on a global scale." Following the acquisition announcements, which coincided with a disappointing earnings report in March, analysts at Piper Sandler reiterated their hold recommendation on the stock. One reason for concern, they said, was that "integrating multiple acquisitions at once may create some noise near-term."
Axios
12 hours ago
- Business
- Axios
Vivodyne raises $40M for human tissue drug testing
Vivodyne, a San Francisco-based startup using lab-grown human tissues to discover and develop drugs, raised $40 million in a Series A led by Khosla Ventures. Why it matters: Vivodyne says demand is "surging" from pharma clients following the FDA's announced plans to "phase out" animal testing requirements in drug development. Follow the money: New investors include Lingotto Investment Management, Helena Capital and Fortius Ventures. Existing investors Kairos Ventures, CS Ventures, Bison Ventures and MBX Capital also participated. Vivodyne has raised about $78 million to date, after a $38 million seed round in 2023. CEO Andrei Georgescu wouldn't disclose Vivodyne's valuation but said it grew significantly with the Series A. How it works: Vivodyne is using automated robotic platforms and AI to grow thousands of lab-grown, fully functional human tissues and produce data to discover and develop drugs. The pre-clinical technology is designed to be used in lieu of animal testing, and Vivodyne says its platform can improve the success rate in human trials. The platform can produce human bone marrow, lymph nodes, liver and other organs, and model diseases, including cancer, fibrosis, autoimmunity and infections. Zoom in: Top pharma companies are already testing drugs and therapies using Vivodyne's approach. "We are a partnerships company that spans the entire breadth of preclinical development," Georgescu says. The company, which employs about 40 people, also has some of its own drug programs but Georgescu declined to share specific disease targets.
The Hindu
14 hours ago
- Business
- The Hindu
Anthropic hits $3 billion in annualised revenue on business demand for AI
Artificial intelligence developer Anthropic is making about $3 billion in annualised revenue, according to two sources familiar with the matter, in an early validation of generative AI use in the business world. The milestone, which projects the company's current sales over the course of a year, is a significant jump from December 2024 when the metric was nearly $1 billion, the sources said. The figure crossed $2 billion around the end of March, and at May's end it hit $3 billion, one of the sources said. While consumers have embraced rival OpenAI's ChatGPT, a number of enterprises have limited their rollouts to experimentation, despite board-level interest in AI. Anthropic's revenue surge, largely from selling AI models as a service to other companies, is a data point showing how business demand is growing, one of the sources said. A key driver is code generation. The San Francisco-based startup, backed by Google parent Alphabet and is famous for AI that excels at computer programming. Products in the so-called codegen space have experienced major growth and adoption in recent months, often drawing on Anthropic's models. This demand is setting Anthropic apart among software-as-a-service vendors. Its single-quarter revenue increases would count Anthropic as the fastest-growing SaaS company that at least one venture capitalist has ever seen. "We've looked at the IPOs of over 200 public software companies, and this growth rate has never happened," said Meritech General Partner Alex Clayton, who is not an Anthropic investor and has no inside knowledge of its sales. He cautioned that these comparisons are not fully precise, since Anthropic also has consumer revenue via subscriptions to its Claude chatbot. Still, by contrast, publicly traded SaaS company Snowflake took six quarters to go from $1 billion to $2 billion in such run-rate revenue, Clayton said. Anthropic competitor OpenAI has projected it will end 2025 with more than $12 billion in total revenue, up from $3.7 billion last year, three people familiar with the matter said. This total revenue is different from an estimated annualized figure like Anthropic's. Reuters could not determine this metric for OpenAI. The two rivals appear to be establishing their own swim lanes. While both offer enterprise and consumer products, OpenAI is shaping up to be a consumer-oriented company, and the majority of its revenue comes from subscriptions to its ChatGPT chatbot, OpenAI Chief Financial Officer Sarah Friar told Bloomberg late last year. OpenAI has not reported enterprise-specific revenue but said in May that paying seats for its ChatGPT enterprise product have grown to 3 million, from 2 million in February, and that T-Mobile and Morgan Stanley are among its enterprise customers. In the consumer race, Anthropic's Claude has seen less adoption than OpenAI. Claude's traffic, a proxy for consumer interest, was about 2% of ChatGPT's in April, according to Web analytics firm Similarweb. Anthropic, founded in 2021 by a team that departed OpenAI over differences in vision, closed a $3.5 billion fundraise earlier this year. That valued the company at $61.4 billion. OpenAI is currently valued at $300 billion.
